Before the Covid-19 Pandemic, Southwest Airlines was profitable for forty-seven consecutive years. A rare and astonishing feat, given the volatility of the aviation industry.
According to the late Herb Kelleher, the company’s former CEO, one of the many reasons for Southwest’s success was its deliberateness in making strategic trade-offs.
Greg Mckeown summarizes Kelleher’s approach in his book, Essentialism: The Disciplined Pursuit of Less, writing:
Rather than try to fly to every destination, [Southwest Airlines] had deliberately chosen to offer only point-to-point flights. Instead of jacking up prices to cover the cost of meals, [Kelleher] decided they would serve none. Instead of assigning seats in advance, they would let people choose them as they got on the plane. Instead of upselling their passengers on glitz first-class service, they offered only economy.
Southwest developed its Hedgehog Concept and mastered one thing well: doing less, but better.
More, But Worse
Critics lambasted the low-cost carrier for its decision to make cutbacks. An airline refusing to serve in-flight meals?! Whoever heard of such a thing! But over time, once word got around that the airline’s profits were skyrocketing, many of its competitors began paying attention, with some even imitating its approach. [1]
Once known for its exemplary, almost fancy service, Continental was the most famous of them—only for the wrong reasons. Rather than going all-in on Southwest’s approach, the airline kept its existing strategy while simultaneously trying to mimic its rival. [2]
For instance, Continental introduced a new service, Continental Lite, and adopted Southwest’s practice of scrapping in-flight meals. But because it didn’t have the operational efficiencies to compete on price, it was strongarmed into curbing spending elsewhere.
Mckeown writes, “While Southwest had made conscious, deliberate trade-offs in key strategic areas, Continental was forced to sacrifice things around the margins that weren’t part of a coherent strategy.”
As a result, Continental compromised the quality of its service, which, in turn, undermined its competitiveness in the marketplace. Late flights and cancellations garnered thousands of complaints daily, costing the airline millions of dollars in the process.
Continental tried to do more, but better—and lost.
Less, But Better
We make trade-offs between two or more things we want or must do every day. Binge-watching another TV show episode instead of finishing a book we meant to finish. Catching up on another hour in bed and ignoring our promise to work out the evening before.
Examples like these are minor, of course. Insignificant even. Even when we know what we’re giving up to have what we want in the moment, the consequences—if we can even call them that—are as minor as the trade-offs we’re making. No one, other than ourselves, perhaps, will chastise us for not following through on the commitments we make to ourselves.
Real problems arise, however, when we ignore the reality of trade-offs. When we convince ourselves, “I can do it all” or “I can do both.” But we can’t, at least not in the long term or to our full capacity. To paraphrase Ryan Holiday, everything we say yes to is a no to something else. [3]
When we ignore the reality of trade-offs, we end up like the fox in Isaiah Berlin’s essay, trying everything and achieving nothing. What’s more, when we ignore the reality of trade-offs, we leave ourselves open to others—our colleagues, our friends, our customers—deciding for us, moving us further from where we want to be.
McKeown writes that rather than ignoring the reality of trade-offs, we must choose the sacrifices we’re willing to make. Instead of asking, “How can I have both?” we must ask, “Which problem do I want?” Rather than asking, “What do I have to give up?” we must ask, “What do I want to go big on?”
Only when we’re clear on what we’re giving up and the reasons behind the trade-offs we’re making can we invest our limited time, energy, and attention in the tasks and activities that make the highest possible contributions to our goals.
Do less, but better.
Footnotes
[1] Reactions to Southwest’s new approach remind me of the John Hope Bryant quote, “First they will ignore you, Then they will criticize you, Then they will try to copy you, and then you will win.”
[2] McKeowen refers to Continental’s mistake as straddling, a term coined by Harvard Business School professor Michael Porter. You can read my summary of Essentialism here.
[3] I paraphrased Holiday’s quote taken from this tweet.
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